Consolidated versus consolidating financials
A combined financial statement simply brings together a group of companies' financial statements into one document.
The different companies' financial statements remain separate from one another.
Intercompany transactions are those occurring between the parent and the subsidiary or the companies in the group.
This account is also known as a minority interest account.
This account keeps track of an interest in the subsidiary that the parent does not control.
Such acquired stakes should be recorded in the financial statements.
If a company holds a stake in another company it is referred to as the ‘parent company’.